Oil discovery in Colombian department of Meta

Last January, the National Hydrocarbons Agency (ANH) reported the discovery of oil in the Indico-1X, located in the municipality of Cabuyaro, Meta, in the region of the eastern plains of Colombia. The discovery occurred during the development of phase II of the exploratory plan of the CPO-5 block. The Indico-1X well has a production potential of 4000 barrels per day, is controlled by the multinational Indian company ONGC Videsh and is the second discovery of the block after the discovery of oil in the Mariposa-1 well, in July 2017.

Interestingly, the two wells are light crude who is atypical in for the area that is characterized by its heavy and extra-heavy crudes. Light crude is easier to extract and transform for commercial purposes than the heavier crudes.

From an economic point of view, the discovery represents greater royalties and taxes revenue as well as a employment opportunities. Iván Duque, President of the Republic of Colombia, has recognized the oil discovery and highlighted its importance for the development of the country. The director of the ANH, Luis Miguel Morelli explained Colombia has a 23% stake in the well discovered in January and therefore can generate a significant amount of additional resources for the state. The Minister of Mines and Energies, Maria Fernanda Suárez, indicated she was optimistic about the finding and the possibilities for Colombia to increase its level of reserves.

Although the well is still being studied, expert analysis indicates that it is highly probable that the site has a significant depth and therefore an important amount of oil given its proximity to Pozo Llanos 34. Also by the end of 2019, 9 to 10 exploratory wells will be drilled at the site.

The Llanos region in Colombia produces 74% of the country’s oil. The department of Meta, where the well was discovered, also in the Llanos region, generates half of the national production. Exploration projects are promising to promote the development of the production regions, where it is expected to receive 63% higher royalties in 2019 and 2020, as compared with the previous 2 years.

Oil and the mining-energy sector is of great importance for Colombia. Between 2010 and 2017, it contributed on average 9% of the GDP and 70% of the total exports of the country. In the last seven years the royalties, taxes and dividends amounted to more than 153 trillion Colombian pesos. New oil discoveries in Colombia, are promising for the future of the economy, encourage foreign investment and can generate a significant movement of employment, including specialists in the oil industry.